 "Oil poised for 6th weekly drop as signs of oversupply persist")
Oil was poised for a sixth week of losses amid concern about oversupply and as the dollar gained after US jobs data bolstered speculation that America's economy can withstand higher rates as soon as next month.
Crude futures fell 0.8 per cent in New York, taking the weekly loss to six per cent. The dollar rose against all but three of its 16 major peers, making oil and other commodities priced in the US currency less attractive. Opec's largest members have sustained record output while US inventories remain more than 90 million barrels above the five-year seasonal average.
West Texas Intermediate (WTI) for September delivery fell 35 cents to $44.31 a barrel on the New York Mercantile Exchange at 9:36 am local time. The contract fell 49 cents to $44.66 on Thursday, the lowest close since March 19.
Brent for September settlement declined 51 cents to $49.01 a barrel on the London-based ICE Futures Europe exchange. It slid 7 cents to $49.52 on Thursday. The European benchmark crude traded at a premium of $4.68 to WTI.
US employers added 215,000 jobs last month as the unemployment rate stayed at a seven-year low of 5.3 per cent, signs of further economic progress that's keeping the Fed on the path toward raising rates in September.
'Unsustainable' prices
Current oil prices are unsustainable and the market will rebalance in the next six to 12 months as US output declines, UBS Group AG said in a note.
"Oil production in key shale plays in the US is already declining," the bank said. "This decline will become more visible and a more powerful drag on overall U.S. production in coming quarters."
Crude inventories in the US fell 4.4 million barrels to 455.3 million last week, according to the Energy Information Administration. Output expanded by 52,000 barrels a day to 9.47 million, the first gain in four weeks.
US lawmaker Chuck Schumer, a New York Democrat, said he will oppose last month's nuclear agreement with Iran, a deal that is set to boost supply in an already oversupplied market. Congress has until September 17 to review the accord between the US, Iran and five other world powers.
Obama veto
If lawmakers pass a resolution of disapproval - the likely outcome in the Republican-led House and Senate - President Barack Obama has said he will veto it. A technical indicator shows prices have probably dropped too quickly to sustain further losses. WTI's 14-day relative strength index is about 24, below 30 for the sixth straight day, data compiled by Bloomberg show. A reading below 30 typically signals the market is oversold.
"We are close to a local bottom as a lot of bearish data and sentiment is now probably priced in," Torbjoern Kjus, an analyst at DNB ASA in Oslo, said by email. "If people start seeing that US oil production is on its way down, that could become a catalyst for somewhat higher prices again."
Crude futures fell 0.8 per cent in New York, taking the weekly loss to six per cent. The dollar rose against all but three of its 16 major peers, making oil and other commodities priced in the US currency less attractive. Opec's largest members have sustained record output while US inventories remain more than 90 million barrels above the five-year seasonal average.
West Texas Intermediate (WTI) for September delivery fell 35 cents to $44.31 a barrel on the New York Mercantile Exchange at 9:36 am local time. The contract fell 49 cents to $44.66 on Thursday, the lowest close since March 19.
Brent for September settlement declined 51 cents to $49.01 a barrel on the London-based ICE Futures Europe exchange. It slid 7 cents to $49.52 on Thursday. The European benchmark crude traded at a premium of $4.68 to WTI.
US employers added 215,000 jobs last month as the unemployment rate stayed at a seven-year low of 5.3 per cent, signs of further economic progress that's keeping the Fed on the path toward raising rates in September.
'Unsustainable' prices
Current oil prices are unsustainable and the market will rebalance in the next six to 12 months as US output declines, UBS Group AG said in a note.
"Oil production in key shale plays in the US is already declining," the bank said. "This decline will become more visible and a more powerful drag on overall U.S. production in coming quarters."
Crude inventories in the US fell 4.4 million barrels to 455.3 million last week, according to the Energy Information Administration. Output expanded by 52,000 barrels a day to 9.47 million, the first gain in four weeks.
US lawmaker Chuck Schumer, a New York Democrat, said he will oppose last month's nuclear agreement with Iran, a deal that is set to boost supply in an already oversupplied market. Congress has until September 17 to review the accord between the US, Iran and five other world powers.
Obama veto
If lawmakers pass a resolution of disapproval - the likely outcome in the Republican-led House and Senate - President Barack Obama has said he will veto it. A technical indicator shows prices have probably dropped too quickly to sustain further losses. WTI's 14-day relative strength index is about 24, below 30 for the sixth straight day, data compiled by Bloomberg show. A reading below 30 typically signals the market is oversold.
"We are close to a local bottom as a lot of bearish data and sentiment is now probably priced in," Torbjoern Kjus, an analyst at DNB ASA in Oslo, said by email. "If people start seeing that US oil production is on its way down, that could become a catalyst for somewhat higher prices again."